If your business uses AI or dynamic pricing tools, it’s time to take a closer look at how they work. On May 9, 2025, Governor Kathy Hochul signed Assembly Bill A3008 into law. This new law introduces disclosure rules around personalized algorithmic pricing and sets requirements for companies offering AI companions. Some provisions took effect on July 8, 2025, and others will go into effect on November 5, 2025. If you sell to consumers in New York, these rules could apply to you.
Personalized Pricing and What It Means
The new law defines “dynamic pricing” as prices that fluctuate depending on conditions. That could be based on time, location, or demand. But what the law specifically targets is “personalized algorithmic pricing,” which are prices set by an algorithm using personal data from the consumer. If your business adjusts prices based on someone’s history, online behavior, or identifiable characteristics, you’re likely using personalized algorithmic pricing.
Starting July 8, 2025, businesses must clearly disclose when personalized pricing is being used. The required notice is: “THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.” It must be clearly and conspicuously displayed to the consumer before purchase. If the disclosure isn’t made, the business could face penalties of up to $1,000 per violation.
Some businesses are exempt. This includes insurance companies governed by New York Insurance Law, financial institutions covered by the Gramm-Leach-Bliley Act, and businesses using subscription-based pricing if the offer is below the contracted rate. The law does not create a private right of action, meaning that individual consumers cannot sue; however, the Attorney General can pursue enforcement.
An earlier version of the law attempted to ban the use of protected class data (like race, gender, or religion) in pricing. That specific language was removed, but discriminatory pricing may still be actionable under existing anti-discrimination laws in New York.
AI Companions and Bot Disclosure
Another part of A3008 addresses AI companions, which are the systems that simulate ongoing social interaction using artificial intelligence. If your business uses or provides AI tools that retain user information, ask unprompted emotional questions, or engage in personal dialogue, you may be considered an operator under this law.
Starting November 5, 2025, operators of AI companions must:
- Include safety protocols that detect and respond to signs of suicidal thoughts or self-harm.
- Provide users with crisis service referrals, including information on suicide hotlines.
- Notify users that they are interacting with a bot. This must happen at the start of each interaction and at least once every three hours during ongoing conversations.
Failure to follow these requirements can result in civil penalties of up to $15,000 per day. Like the pricing rules, this part of the law does not include a private right of action.
Stay Compliant Before the Deadlines
These changes matter, even for smaller businesses. Whether you use third-party platforms or build your own tools, it’s your responsibility to know how pricing is determined and whether AI-driven systems are interacting with consumers. Begin auditing your systems now and verify whether any disclosures are required.
If you’re unsure if this law might apply to your operations, Rodriguez-McCloskey PLLC can help review your pricing models and AI tools to ensure compliance and reduce risk. Reach out to learn more about how this law affects your business and what you may need to do in order to remain compliant.
